What hope for Spain?

This week Spaniards have seen their credit rating downgraded, rising unemployment and even football succumbing to the gloom

Real Madrid's Cristiano Ronaldo is dejected after failing to score in the penalty shootout that resulted in his side losing their Champions League semi-final to Bayern Munich. Photograph: Susana Vera/Reuters

With Spain's economy in its second recession in three years, unemployment in the first quarter reached 24.4%, 5.6 million people. Since Spain's housing bubble burst at the end of 2007, the total of those jobless has tripled, giving the country the worst unemployment headache in the European Union.

Until now football has at least provided a welcome distraction from the day-in-day-out talk of crisis. Grabbing a European Championship in 2008 and a World Cup in 2010, Spain's international team has demonstrated to the world a peerless professionalism in the beautiful game – and delivered a hugely necessary injection of national self-esteem.

But even that pride took a kicking this week in a few doses of bad luck. Fans, broadcasters and advertisers were revving up for a dream Champions League final between arch Spanish rivals Barcelona and Real Madrid. But a strong Chelsea and German penalties got in their way. To top it off, on Friday afternoon, Barcelona's most successful coach – and one of the most courteous men in football – Pep Guardiola announced he would step down at the end of the season.

Those hunting for work need a lot more hope than they are getting at the moment.

Speaking to job-hunters queueing outside a Madrid unemployment centre for their benefits on Friday was sobering. Young and old, Spaniards and immigrants, those who had been out of work for three years and a man who was signing on that day, they all shared the same fear they would never work again.

The construction business has shed jobs and it is not clear which businesses will pick up the slack. The government's budget cuts have taken the axe to research and development, a move some scientists say is a death knell to badly needed innovation.

In the unemployment queue in Madrid, a single mother in her 40s, with a daughter at university, told me she had already used up her two years' unemployment benefit and would receive a state payment of about €400 for just three months more.

I thought of her later on Friday when economy minister Luis de Guindos told a news conference that Spain wouldn't be able to create any new jobs until 2014. Many Spaniards, and immigrants who came to the country in better times, talk about leaving, but the reality is most don't have the language skills or the airfare to go anywhere more promising.

With about 1.7 million homes where all the adults are unemployed, once benefits run out, a rising number of people will end up on the streets. Yet with the price of Spain's debt continually under pressure, the government sees no choice but to maintain its austerity course, determined to avoid Spain needing a bailout like Greece, Ireland and Portugal. In order to reach its deficit targets, Spain's government announced VAT and other taxes will rise next year.

The solutions are not easy. What is clear is that more economists and those looking for work are pressing for more to be done to break the vicious cycles of spiralling benefit payments and pressure on state finances, between confidence and spending, between cutting back and placing workers in industries with a future.